The AIM cycle process as described in this paper was developed by the Mesa

Research Group, LLC.

Exhibit 13. The closed-loop Strategic Portfolio Management process.

Exhibit 12 depicts a typical nine-month implementation schedule. The AIM process can
be implemented relatively quickly, however implementation of the resulting inititiaves
can span a number of years. This can be accomplished concurrently with
implementation of an EPM system, if one is not already in place.
The Strategic Portfolio Management process is a closed loop system that links
enterprise strategy investments to project results and provides performance metrics
feedback on strategic outcomes to the executive leadership team. (Exhibit 13).

Exhibit 14. Initiatives to achieve a preferred future state.

 Exhibit 15. Initiative Articulation Diagram.

Strategic Portfolio Management

A smart, realistic and relatively fast way to gain
sustainable competitive advantage
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CONFERENCE PAPER Portfolio Management 2 March 2005
Garfein, Stephen J.
How to cite this article:
Garfein, S. J. (2005). Strategic Portfolio Management: A smart, realistic and relatively fast way
to gain sustainable competitive advantage. Paper presented at PMI® Global Congress
2005—Asia Pacific, Singapore. Newtown Square, PA: Project Management Institute.
Stephen J. Garfein
President, RPM Systems Corporation

Abstract

Project Management helps ensure that projects are done right. Strategic
Portfolio Management determines the very future of the enterprise; its
competitiveness, and ultimately, its survival. Think of strategic successes such
as Microsoft, Costco, and Starbucks and strategic failures such as TWA,
Digital Equipment, and WordPerfect. Each had a strategic portfolio. Each
made strategic decisions on what to place in their portfolios and how to
execute. Some have thrived. Some have not survived. This paper provides a
framework for developing and maintaining an enterprise-wide Strategic
Portfolio Management capability.
This paper defines and champions Strategic Portfolio Management which the
author believes is the natural, evolutionary next step made possible by the
foundational enterprise project management (EPM) tools and process
currently being implemented in many organizations.

Strategic Portfolio Management Defined

Strategic Portfolio Management is a closed-loop process encompassing all

enterprise investments. To illustrate, a company's portfolio options might
includAnswer: B
The project team develop the project plan, which includes risk
identification and planning. The team may seek the assistance of senior
management and the results are approved by senior management but the
development remains the project’s responsibility. Similarly, only some of
the project constraints will come from or be controlled by management.
The project team is responsible for identifying and documenting all
constraints.
Minimising unnecessary changes to the project objectives is the exclusive
responsibility of 'senior management', which includes the sponsor . They
develop and sign off on the business case and project charter, which
establishes the objectives of the project is the responsibility of senior
management (portfolio management, sponsor, etc).
Question 4:
The "halo effect" (or the effect of the "Peter Principle") refers to the
tendency to:
A. Move people into project management because they have project
management qualifications.
B. Move people into project management because they are good in their
technical field.
C. Hire people from leading educational institutions because they are seen
to the best.
D. Promote from within.
Answer: B
These terms refer to an assumption often made during staff acquisition
that demonstrated competence in one area will automatically flow through
to competence in other unrelated areas, however, a person who is good in
technical role may not be good at a management role.
For example: "You are our best business analyst; therfore you will be a
great Project Manager!". These effects seem to be innate biases that can
affect decision making.
Peter Principle - in a bureaucracy people are promoted to their level of incompetence.
e funding internally generated ideas, buying other companies, returning cash
to stockholders as dividends, modernizing facilities, implementing a major IT
system, increasing employee compensation, and paying down debt. Deciding
which of the options to invest in is a core responsibility of company's executive
leadership team. This paper presents a process for making those investment
decisions and then translating the resulting strategic portfolio into great
performance.
Part 1. Presents three brief case studies illustrating various aspects of
Strategic Portfolio Management.
Part 2. Describes the AIM Process for developing and managing a strategic
portfolio.
Part 3. Outlines the project management prerequisites for Strategic
Portfolio Management.
Part 4. Discusses the importance of the leadership factor in Strategic
Portfolio Management implementation.
Part 5. Offers seven best practices for translating great strategy into great
performance.
Strategic Portfolio Management can be a vehicle for transformation and
breakthrough. Bill Davidson writes in his book Breakthrough, “Think of
breakthrough as enterprise-scale innovation—significant enough to shape an
emerging enterprise or to reform the core of an existing organization”(2004, p.
4). Breakthroughs typically result from large-scale, long-term initiatives that
use advanced technologies and radical process innovations to achieve leaps
in operating performance, financial results, and market position as outlined in
the following Apache, Yellow Roadway, and Boeing examples.
Enterprise project management (EPM) capability is an essential component of
Strategic Portfolio Management. Exhibit 1 depicts the author's view of the
emerging role of Strategic Portfolio Management that it is built on the
foundation of enterprise project management. Exhibit 2 lists currently available
EPM solutions. There are numerous enterprise project management solutions
available today. All require significant tailoring and staff training to be
successful. However, once an enterprise makes the investment and masters
the EPM toolset, it is ready to use it strategically, as described in the paper.
The Strategic Portfolio Management process is software independent and can
be implemented with any of the solutions listed.
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